Spend on IT now before prices rise

CIOs should cash in on savings of up to 70 per cent in the flat IT market before prices start to rise next year, according to new research.

Analyst firm Butler Group predicts there will be no improvement in the IT market until 2004 but that prices will pick up quickly when it does.

Martin Butler, founder and president of Butler Group, said IT decision-makers are unaware of their buying power for products, services and skills in the current depressed market.

He said in a statement: "IT buyers tend to spend most when prices are high and least when they are low. Unfortunately this means that they will probably open their cheque books in a year or so time when prices are once again on the increase. To take advantage of the current situation buyers need to break this cycle of investing when prices are high and reducing budgets when they are low."

In product areas the biggest bargains are in enterprise application integration, customer relationship management and ERP where Butler claims users can negotiate discounts of 60 to 70 per cent

Skills savings in the region of 35 to 45 per cent are also available for those product areas, with web-related skills being the most heavily discounted, according to Butler Group.

The research was based on discussions with buyers and vendors and although there are no conclusive figures for outsourcing, Butler said businesses should strike deals now as this is the area that will grow most rapidly during market recovery.